Wesleyan suing former chief investment officer

MIDDLETOWN -- Wesleyan University is suing its former chief investment officer and 17 other individuals and business entities whom the university says profited from breaches of his employment agreement and the school's conflict-of-interest policy.

The lawsuit, filed in Middletown Superior Court Nov. 24, and first reported by the student newspaper the Wesleyan Argus, states that Thomas Kannam, of Durham, defrauded the university of thousands of dollars, expensed trips that were not related to his job and exploited his position at the university for the gain of his outside "entrepreneurial activities." Other named defendants include Kannam's wife, Heather McCutchen, and his father's company, Advanced Device Technology Inc.

Wesleyan is seeking in excess of $3 million in damages.

Kannam, who was earning more than $400,000 in 2006-07, was fired Oct. 13. A voicemail left for him Wednesday was not immediately returned, and his lawyer, Stephen Fitzgerald, did not immediately return a phone call seeking comment. He has reportedly denied the allegations against his client.

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Michael Harrington, a partner at Murtha Cullina, who is representing the university in the suit, was unavailable for comment Wednesday afternoon.

In violation of his employment agreement, which stated that he could not serve on any boards or engage in other activities that would take time away from his responsibilities except by permission of the university president, Kannam continued to work without permission for various business ventures, the lawsuit states.

According to the suit, a significant portion of the calls he made from his Wesleyan office and the majority of his e-mails were non Wesleyan-related, and he provided proprietary information belonging to Wesleyan to his outside business ventures ("Let's poach it all," he allegedly wrote in an e-mail).

He also had university interns and employees performing research for Belstar Group, a company whose investment committee he chaired, the lawsuit alleges, and let Belstar Group use the university's quantitative analysis center free of charge.

The lawsuit states he hid his involvement with Cross Border Capital LLC, the hedge fund vehicle he helped found, and which he called CBCA, from Wesleyan -- although he allegedly wrote to his wife from a university computer "Dough update for CBCA wives: very productive meeting in N.Y. today. Summit in Durham tonight."

Kannam also charged the university for a trip with his brother to the Super Bowl in 2008; a trip for him and his brother to Torrey Pines, Calif., for the "golf outing of the century"; a trip to India to visit relatives and attend a wedding; and trips to interviews at other higher-education institutions, including a visit to Cambridge University in England, the complaint states, which he double-billed to Wesleyan and Cambridge, the lawsuit states.

The complaint states that when a Wesleyan board member asked about his involvement with Belstar toward the end of his employment, Kannam told Belstar Group managing partner Daniel Yun that he "gave the board member our Korea story."

According to the complaint, Kannam and Yun "conspired to draft a letter to the university's president to eventually be sent from an alleged Korean dignitary in order to create a ruse for Kannam's continued entrepreneurial ventures for the Belstar organizations."

Wesleyan spokesman David Pesci said the university does not comment on ongoing litigation.